Robeco Global Credits - Short Maturity IH USD

Reinout Schapers is Portfolio Manager Investment Grade in the Credit team. Prior to joining Robeco in 2011, Reinout worked at Aegon Asset Management where he was a Head of European High Yield. Before that, he worked at Rabo Securities as an M&A Associate and at Credit Suisse First Boston as an Analyst Corporate Finance. Reinout has been active in the industry since 2003. He holds a Master's in Architecture from the Delft University of Technology. Evert Giesen is Portfolio Manager Investment Grade in the Credit team. Previously, he was an Analyst, responsible for covering the Automotive sector within the Credit team. Prior to joining Robeco in 2001, Evert worked at AEGON Asset Management for four years as a Fixed Income Portfolio Manager. He has been active in the industry since 1997 and holds a Master's in Econometrics from Tilburg University. The Robeco Global Credits - Short Maturity fund is managed within Robeco’s credit team, which consists of nine portfolio managers and twenty-three credit analysts (of which four financials analysts). The portfolio managers are responsible for the construction and management of the credit portfolios, whereas the analysts cover the team’s fundamental research. Our analysts have long term experience in their respective sectors which they cover globally. Each analyst covers both investment grade and high yield, providing them an information advantage and benefiting from inefficiencies that traditionally exist between the two segmented markets. Furthermore, the credit team is supported by dedicated quantitative researchers and fixed income traders. On average, the members of the credit team have an experience in the asset management industry of seventeen years, of which eight years with Robeco.

The fund is established in Luxembourg and is subject to the Luxembourg tax laws and regulations. The fund is not liable to pay any corporation, income, dividend or capital gains tax in Luxembourg. The fund is subject to an annual subscription tax ('tax d'abonnement') in Luxembourg, which amounts to 0.05% of the net asset value of the fund. This tax is included in the net asset value of the fund. The fund can in principle use the Luxembourg treaty network to partially recover any withholding tax on its income.

Investors who are not subject to (exempt from) Dutch corporate-income tax (e.g. pension funds) are not taxed on the achieved result. Investors who are subject to Dutch corporate-income tax can be taxed for the result achieved on their investment in the fund. Dutch bodies that are subject to corporate-income tax are obligated to declare interest and dividend income, as well as capital gains in their tax return. Investors residing outside the Netherlands are subject to their respective national tax regime applying to foreign investment funds. We advise individual investors to consult their financial or tax adviser about the tax consequences of an investment in this fund in their specific circumstances before deciding to invest in the fund.

The fund incorporates sustainability in the investment process via exclusions, ESG integration, a minimum allocation to ESG-labeled bonds, and engagement. The fund does not invest in credit issuers that are in breach of international norms or where activities have been deemed detrimental to society following Robeco's exclusion policy. Financially material ESG factors are integrated in the bottom-up security analysis to assess the impact on the issuer's fundamental credit quality. In the credit selection the fund limits exposure to issuers with an elevated sustainability risk profile. Furthermore, the fund invests at least 5% in green, social, sustainable, and/or sustainability-linked bonds. Lastly, where issuers are flagged for breaching international standards in the ongoing monitoring, the issuer will become subject to engagement.The following sections display the ESG-metrics that are relevant for this fund along with short descriptions. For more information please visit the sustainability-related disclosures. The index used for all sustainability visuals is based on [Index name].

In August, the market rally that had started in May ended. Spreads for the Bloomberg Global Agg Corp 1-5 rose 8 bps to 1.14%, leading to an excess return over Treasuries of -0.14% for this index. The US economy is not showing any signs of a significant slowdown. On a positive note, inflation numbers are coming down but remain above the Fed's target. However, markets fear that rates need to stay higher than previously expected. 5-year Treasury yields rose 7 bps to 4.25. In Europe, economic indicators point to weakness, while inflation numbers remain high. The Chinese economy remains weak and the PBoC cut rates in August. August was a relatively quiet month for primary markets and there were few surprises from corporate earnings.

Based on transaction prices, the fund's return was 0.45%. With beta reduced to slightly above 1, the contribution from beta positioning was only marginally negative in August. Issuer selection made a strong positive contribution, which is largely explained by positive selection in the banking and consumer cyclical sectors. In banking, selection in senior bonds was positive. Positive contributions came from positions in Permanent TSB, Santander UK, NIBC and Celanese

A buy-on-dips (and sell-the-rally) strategy from a conservative basis remains our preferred approach. Rates and recession fears are the key drivers in this cycle. Valuations are still around their long-term average, but have tightened over recent months. Valuations in financials still look relatively attractive, while spreads in cyclical industrials are vulnerable if recession fears rise again. The Fed and ECB continue to be hawkish as inflation remains higher than desired. Both central banks are continuing their quant tightening programs, which are taking liquidity out of the market. Over the last quarter, we have seen several moments when spreads widened and rallied thereafter. We expect this to continue given the macro uncertainty and tighter liquidity in the market.